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Inflation Target Fulfillment in the Czech Republic in 1998–2007: Some Stylized Facts

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Abstract

This paper provides some stylized facts of inflation target fulfillment in the Czech Republic in 1998–2007. In the first part, it discusses briefly the general macroeconomic conditions of the Czech inflation targeting regime, including an identification of the main shocks affecting its performance. The second part compares the extent of inflation target non-fulfillment in the Czech Republic with the experience of other inflation targeting countries. It turns out that the success rate in terms of inflation target fulfillment has changed over time. While in the early phase of inflation targeting the deviations of inflation from the CNB’s targets were high by international comparison, more recently the CNB has converged to the track record of relatively successful inflation targeting central banks.

Suggested Citation

  • Juraj Antal & Michal Hlaváèek & Tomáš Holub, 2008. "Inflation Target Fulfillment in the Czech Republic in 1998–2007: Some Stylized Facts," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(09-10), pages 406-424, December.
  • Handle: RePEc:fau:fauart:v:58:y:2008:i:9-10:p:406-424
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    File URL: http://journal.fsv.cuni.cz/storage/1140_1140_1__antal-hlavacek-holub.pdf
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    References listed on IDEAS

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    1. Scott Roger & Mark R. Stone, 2005. "On Target? the International Experience with Achieving Inflation Targets," IMF Working Papers 05/163, International Monetary Fund.
    2. Lin, Shu & Ye, Haichun, 2007. "Does inflation targeting really make a difference? Evaluating the treatment effect of inflation targeting in seven industrial countries," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2521-2533, November.
    3. Martin Čihák & Tomáš Holub, 1998. "Inflation Targeting in the Czech Republic: Old Wine in New Bottles," Eastern European Economics, Taylor & Francis Journals, vol. 36(3), pages 49-67, June.
    4. Johnson, David R., 2002. "The effect of inflation targeting on the behavior of expected inflation: evidence from an 11 country panel," Journal of Monetary Economics, Elsevier, vol. 49(8), pages 1521-1538, November.
    5. Katerina Smídková & Viktor Kotlán & David Navrátil & Ales Bulir, 2008. "Inflation Targeting and Communication; It Pays Off to Read Inflation Reports," IMF Working Papers 08/234, International Monetary Fund.
    6. Tomáš Holub & Jaromír Hurník, 2008. "Ten Years of Czech Inflation Targeting: Missed Targets and Anchored Expectations," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(6), pages 67-86, November.
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    Cited by:

    1. Lubos Hanus & Lukas Vacha, 2015. "Business cycle synchronization of the Visegrad Four and the European Union," Working Papers IES 2015/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2015.
    2. Lubos Hanus & Lukas Vacha, 2015. "Business cycle synchronization within the European Union: A wavelet cohesion approach," Papers 1506.03106, arXiv.org, revised Feb 2016.
    3. Juraj Antal & Michal Hlaváèek & Roman Horváth, 2008. "Do Central Bank Forecast Errors Contribute to the Missing of Inflation Targets? The Case of the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(09-10), pages 434-453, December.

    More about this item

    Keywords

    monetary policy; inflation targeting;

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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